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All KWG Longs,
On October 14, 2016, KWG was halted and subsequently issued a news release announcing that Bold Ventures and KWG Earn Initial Interest in Black Horse Project.
There were some on this Board that seemed somewhat underwhelmed or indifferent toward the news and some questioned the appropriateness of issuing a halt to KWG trading.
Upon further reflection, this news is VERY significant. KWG has satisfied the requirements under their agreement with Fancamp and is now the operator and indeed in control of the Black Horse deposit. This means that there are no looming third party imposed timelines that force management’s hand and distract them from more value-added activities. Further, no further funds need to be spent on the claim which means less need for further financing and possible dilution.
Those are the obvious implications.
Our friends at FSDI have committed to a bankable feasibility study by the end of the year. When this study is ready and presented to the Bank of China – what questions do you think will be asked before $2b (or more) is handed over? Before they pay for a railway to a deposit, they are going to want to ensure that the chromite actually belongs to KWG and that they are the operator and in control of the deposit. This will allow for the building of the railway and the necessary payback in the form of ferrochrome and related off-take agreements.
The chromite actually has to belong to KWG, which it now does.
What’s next? Well, to produce ferrochrome cheaper than any other producer in the world using our patented natural gas reduction method, the Chinese will also want to know about the commercial viability of our patented process. I strongly suspect that KWG is busy working on this and that we should hear something about the time that Frank goes to China to present the bankable feasibility study so he will be able to answer that question.
The only other piece of the puzzle is our First Nations. KWG recently made a very generous offer in the form of a partnership with the affected parties. I know they are currently discussing and considering KWG’s proposal. I suspect that discussions will advance rapidly once KWG has a deal with FSDI and China Rail.
KWG is quickly assembling all the pieces of the puzzle.
Frank is not going to China to discuss a deal. Frank will return from China with a deal.
My best to all KWG Longs.
Keep Digging
My opinion only...it's likely one of the following two:
1. Update on the partnership with First Nations or perhaps even a deal
2. Update on the visit to China regarding the bankable feasibility study
My guess is that it's likely #2.
Good luck to all KWG Longs,
Keep Digging
All KWG Longs,
Recall that the re-scheduled vote on the proposed Capital Re-Organization will be held on August 18, 2016.
If you voted on the proposed Capital Re-Organization for the July 21, 2016 AGM and DO NOT WISH TO CHANGE YOUR VOTE, then you simply do nothing as the vote you submitted for the July 21, 2016 AGM will be used again for the vote on August 18, 2016.
If you wish to change your vote (ex. if you voted NO to the proposed Capital Re-Organization for the July 21, 2016 AGM and wish to change your vote to YES), then you must contact your broker to be issued a new control number to vote via your transfer agent (ex. Computershare, Proxyvote, etc).
My best to all KWG Longs,
Keep Digging
Lar,
Thanks for the post and for the additional supporting information on clarifying the Mgmt Info Circular. The term 'unlimited shares' is indeed standard "boiler plate" language that has been around for decades and there are several clauses in the Circular that have the effect of preventing dilution as a result of the proposed capital reorganization.
Great to see you back on the board. Hope to see more from you in the coming weeks.
Keep Digging
RJ.
Thanks for the post and for pointing out some of the frustration that I am sure is brewing on this board. I too am growing quite weary of the back and forth as it has grown quite repetitive. The same claims over and over about the the creation of unlimited shares, dilution and a falling share price. In some cases I have had to resort to copying and pasting old posts because I cannot bring myself to re-type the same messages over and over again.
I am always open to opinions, thoughts and insight from others and appreciate all that has been contributed on this board. However, I simply will not sit idle while blatant untruths, outright lies and superficial, misguided, uninformed and incorrect assertions are made about a legal document issued from the company. I care too much. I'm heavily invested in this company, believe in it and the management team. I do my due diligence and share what I know with other shareholders and will continue to do so.
My best to you RJ and to all KWG longs,
Keep Digging
All KWG Longs,
Under the Summary of the Capital Reorganization, schedule Part 1 and 2 DO NOT contemplate the “creation of unlimited 1 shares and super 300 shares” as you have stated, but rather contemplate the renaming of the current common shares as Subordinate Voting shares and to “create a new class of convertible shares to be classified at Multiple Voting Shares in an unlimited number…”
You continue to confuse and mislead others with the “creation of new shares” (which never appears in the proposal) versus the “creation of a new class of shares”. Big difference – the former results in more shares, dilution and likely a lower share price, while the latter, creating a new class of shares, has no effect on the number of shares, no effect on dilution and no impact on the share price.
On the issue of the term “in an unlimited number”, we have discussed this concept at length. This is a very standard and typical term used in securities documents. I will re-post again for those that may have missed it or may benefit from a re-read.
Using the term “unlimited” in describing the multiple voting shares is a very common, typical and customary practice when drafting Management Information Circulars, Prospectuses and other securities documents. As this issue has been discussed at length already on this site, I direct all that care to refresh their memory on this issue to the posts that MarlboroDog and I posted back in early July. I also copy/pasted the appropriate section of my July 5 posting for convenience.
MarlboroDog on July 18
Keep Digging on July 5
“Second, there seems to be some sort of preoccupation with the term “unlimited” in the description of the Multiple Voting Shares in the Management Information Circular. Quite simply, management (and counsel who drafted the document) was compelled or more likely obligated to use the term ‘unlimited’ because they just do not know. They do not know how many common shares will be outstanding in the future and therefore do not know how many Multiple Voting Shares will exist in the future since the two are explicitly tied at a ratio of 300:1. Further, they do not know how many investors will exchange their common shares for multiple voting shares.”
On the issue of dilution, I find it very curious that you feel management gives themselves the right to create dilution by virtue of section 3.1 entitled “Anti-Dilution”. Perhaps we need the number of Frank’s lawyers? This section protects KWG shareholders from dilution. This section states that neither class of shares can be “…subdivided, consolidated, reclassified or otherwise changed unless contemporaneously wherein the other class of Participating Shares is subdivided, consolidated, reclassified or otherwise changed in the same proportion and in the same manner so as to preserve the rights conferred hereby on each class in relation to the other class”. What this clearly states is that whatever management does to one class of shares, they must do to the other class of shares in order to preserve the 300:1 ratio. No dilution possible here.
My best to all KWG Longs,
Keep Digging